Taking out personal loans isn’t just for housing anymore

According to conventional wisdom, you’ll only want to take out a personal loan if you need money to buy a home. The price of a home in Australia today is exorbitant – according to Domain Group data, for example, the median in Sydney just surpassed $1.15 million for the first time – so if you want to buy one, you’ll probably need help.

This is all true, but the reality is that homeownership is far from the only reason you may want to compare home loan. There are plenty of major life events you might encounter that would necessitate borrowing a little money, and buying real estate is just the tip of the iceberg. Let’s explore some of the other possibilities.

There are plenty of reasons for a loan

Home loan brokers might get a lot of headlines, but they’re not the only ones helping people access the capital they need. The Huffington Post surveyed Australian borrowers and found a variety of reasons people take out home loans in Sydney.

• Home remodelling: Renovating your place can add a significant amount of value, which often means it’s worth borrowing some cash.

• Major life events: For example, it’s hard to put a price on having the perfect wedding. This is another big reason to borrow.

• Restructuring debts: For people who have multiple large credit card balances, taking out one lump-sum loan can help restructure things nicely.

• Starting a business: New startups aren’t cheap. You need materials, labour and lots of other elements. A loan can help pay for them.

Be careful about how to proceed

There are all sorts of reasons to get a loan, but sometimes caution is best. News.com.au warns that if you apply for too many loans too fast, it can hurt you in the long run.

“It’s not advisable to apply to multiple lenders at a time,” said Greg Symons, co-founder of marketplace lender SocietyOne. “The more inquiries [there are] on your credit report, it will diminish your credit score considerably.”

Usually, the best strategy is to be judicious about the loans you pursue, choosing ones that will offer the best loan interest rates and proceeding only when you’ve found the perfect fit. If you need assistance with finding such loans, that’s not a problem. Our team has access to a deep network of Australian lenders, and we’re ready to find one for you.